The majority of the research conducted over the last few years shows that most individuals in Iowa do not demonstrate financial readiness for their retirement years. Financial stability in retirement takes planning, commitment and saving.
That’s why Johnson Wealth and Income Management is bringing you 6 strategies to help you have a more stable retirement in Iowa.
Start early and stick to your goals.
Obviously, the earlier you start saving, the better, but it’s never too late to start. Even if you’re close to your retirement years, every penny saved helps cover your expenses. And if you’re early in the process, devise a plan and stick to it. Saving even just a small amount each year early in your career could significantly impact the value of your investments over the long term. For example, if you saved $1,000 a year starting when you were 18, growing at an annual rate of 8%, the account could grow to roughly $350,000 by the time you’re 60.
Understand your retirement needs.
Experts estimate that the average person in Iowa requires 70% to 90% of their preretirement income to maintain their standard of living once they’ve stopped working. You should also consider additional costs that may pop up in retirement, such as medical care. The deeper understanding you have of the amount of savings you require to live comfortably, the better you’ll be able to set your goals and stick to them.
Don’t touch your retirement savings and have an emergency fund in place.
When you withdraw your retirement savings early in Iowa, you lose principal, interest and possibly tax benefits. There may also be withdrawal penalties as well. If you change jobs, you should leave your savings invested in your current retirement plan, roll them over to an IRA or your new employer’s plan.
This is also why it’s so important to have an emergency fund in place in case anything unfortunate takes place. Experts in Iowa advise to maintain a savings account with roughly three to six months of expenses for unexpected costs or unforeseen events. This could help limit the need to access longer-term investments or use high interest debt.
Know your retirement savings options.
It’s smart to take advantage of your employer’s qualified retirement plan and save as much as you can up to their matched threshold. If your Iowa employer doesn’t offer a plan, ask about the possibility of starting one. Additional options in Iowa include putting savings into a Traditional or Roth IRA.
Diversity your portfolio.
The saying “you shouldn’t put all your eggs in one basket” holds true when it comes to retirement planning in Iowa as well. When you put all your savings into one form of investment, it increases the risk of losing it, and may limit your return on investment. Asset allocation is a key strategy to properly managing your retirement assets. When it comes to asset allocation, be sure to consider the following factors:
Age: This reflects the aggressiveness of your portfolio, which will likely take more risks when you’re younger and further from retirement.
Risk Tolerance: This could help to ensure that if any losses occur, they can occur at a time when they can still be recuperated.
Whether you need to have your assets to grow or produce income.
Consider working with a financial planner.
It’s never a bad idea to seek professional advice to help ensure you’re making the right decisions that will benefit you in the future. At Johnson Wealth and Income Management, we’re committed to helping you work towards achieving your financial goals and providing you with a “worry free” retirement in Iowa. We consider it an honor and a privilege to help our clients work towards making sound investment decisions that will contribute toward a more secure future. We provide impeccable client service to help reduce taxes and help protect assets by utilizing numerous investment products and strategies, so we can help protect our client’s lifestyle for a lifetime.
Contact us today to learn more.
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